On May 29, Prime Minister Kevin Rudd told radio 3AW that his government has "absolutely no plans to make any change" to the superannuation preservation age — the age at which workers may access the superannuation paid into a super fund by their employer.
Workers may currently take a superannuation lump-sum or pension from age 55.
Rudd's statement followed changes to the age pension in the May 12 federal budget. The qualifying age for the age pension will be progressively raised from 65 to 67 between 2017 and 2023.
The decision to leave superannuation unchanged comes after significant criticism from unions of the government's pension changes.
The Construction Forestry Mining Energy Union and the Australian Manufacturing Workers Union wrote a joint letter to the federal government on May 24 to condemn the pension-age increase. "It is grossly unfair to take away the right to retirement from people in physically tough jobs until they're 67", the unions said.
A proposal to increase the superannuation guarantee age to 67, was included in the tax review by treasury secretary Ken Henry, which was released together with the federal budget.
Between May 12 and May 29, the government made no comment on the superannuation guarantee age. This gave rise to rumours that it would do as the Henry review suggested. At the same time, the government came under pressure from unions.
Whether or not the government's apparent backdown could be seen as a concession to the union movement (most of whose members have a superannuation plan), it was welcomed by Australian Council of Trade Unions president Sharan Burrow.
Burrow also called for "discussions" with the government about the "transition to retirement" according to the May 30 Age.
The Henry review included a recommendation to review the pension age increase before 2020, with the implicit suggestion that it may rise further.
It also said the 9% superannuation levy paid by employers is enough to fund workers' retirement. However, the original proposal to introduce compulsory superannuation under the Keating government in the early 1990s was to raise the levy to 15% over time.
The security of the retirement income offered by superannuation has crumbled as a result of the global economic crisis.
Super funds had lost $100 billion by September 19, according to WAtoday.com. This loss comes directly from the payout that workers will receive on retirement.
On June 10 smartcompany.com.au reported fund research company Chant West had predicted average losses for super funds of 13.4% for the 2008-09 financial year. This would mark the worst year for super funds on record.
The decision to keep the superannuation preservation age unchanged is a small victory for working people. Yet many workers, notably women (who often leave the paid workforce for extended periods to raise children and therefore have smaller superannuation savings) and the low-paid, will continue to be forced to work until 67 before retiring on the age pension.
And the government could still back track on superannuation in the future. Remember the "never-ever" GST.